United States SEC Fines 3 Investment Advisors $540,000 for Acting as Unregistered Brokers for StraightPath Venture Partners in Selling Shares of Pre-IPO Companies & $100,000 Fine on VCP Financial for Using Impermissible Liability Disclaimers Investing in Private Funds by Retail Clients, United States SEC Fined StraightPath Venture Partners $2.8 Million Fine & Disgorgement in 2024 September for Unauthorised Selling Shares of Pre-IPO Companies, Raised $17 Million from 75 Investors and Received $2.1 Million in Compensation
15th January 2025 | Hong Kong
The United States Securities and Exchange Commission (SEC) has fined 3 investment advisors nearly $540,000 for acting as unregistered brokers for StraightPath Venture Partners in selling shares of pre-IPO companies and a $100,000 fine on VCP Financial for using impermissible liability disclaimers investing in private funds by retail clients. In 2024 September, the United States Securities and Exchange Commission (SEC) has settled StraightPath Venture Partners fraud charges with $2.8 million fine & disgorgement for unauthorised selling shares of pre-IPO companies, raising $17 million from more than 75 investors and received $2.1 million in compensation. United States SEC (13/1/25): “The Securities and Exchange Commission today announced settled charges against investment adviser representatives Tamir Shabat, Danny Z. Spiegel, and Joseph J. Orlando, Jr. for acting as unregistered brokers in selling membership interests in LLCs that purported to invest in shares of pre-IPO companies. The SEC also announced settled charges against VCP Financial LLC stemming from its use of impermissible liability disclaimers in a letter it required retail clients to execute when investing in private funds managed by an affiliated entity. According to the SEC’s orders, between June 2019 and March 2020, Shabat, Spiegel, and Orlando each solicited investors for StraightPath Venture Partners, LLC, an entity that offered investments in LLCs that purported to invest in shares of pre-IPO companies and that was previously charged by the SEC. The SEC’s orders find that Shabat and Spiegel were principals of VCP Financial and its predecessor entity LPS Financial and that Shabat and Spiegel formed an entity in 2019 for the purpose of entering into agreements with StraightPath, which entitled them to payments in connection with any investors they successfully solicited to make investments in the StraightPath Funds. The SEC’s orders further find that Spiegel and Shabat operated a sales force of individuals not registered as brokers, including Orlando, an investment adviser representative with VCP Financial, to assist in these efforts. The SEC’s orders against Shabat, Spiegel, and Orlando state that each of them provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of broker activity, despite not being registered as brokers. According to the SEC’s order against VCP Financial, between March 2021 and October 2024, the firm improperly managed its conflict of interest when recommending investments offered by private funds managed by an affiliated entity under common ownership and control. Specifically, VCP Financial required its clients to acknowledge that the firm was disclaiming its role in their investment decisions to invest in those funds and that the firm was not acting as their investment adviser in connection with their investment in those funds. These statements contradicted VCP Financial’s brochure regarding conflict-of-interest management and further could have led a client to believe incorrectly that the client had waived a nonwaivable cause of action against VCP Financial that was provided by state or federal law. The SEC’s orders find that Shabat, Spiegel, and Orlando each violated Section 15(a) of the Exchange Act. Without admitting or denying the SEC’s findings, Shabat agreed to an order requiring him to pay disgorgement and prejudgment interest of $180,559 and a civil penalty of $40,000, Spiegel agreed to an order requiring him to pay disgorgement and prejudgment interest of $175,873 and a civil penalty of $40,000, and Orlando agreed to an order requiring him to pay disgorgement and prejudgment interest of $83,255 and a civil penalty of $20,000. Shabat, Spiegel, and Orlando also agreed to six-month industry and penny stock suspensions. The orders provide that the nearly $540,000 in disgorgement, prejudgment interest, and civil penalties will be transferred to the court-appointed receiver in SEC v. StraightPath Venture Partners, LLC, et al., 22-cv-3897 (S.D.N.Y. 2022) for distribution to harmed investors. The SEC’s order against VCP Financial finds that the firm violated Section 206(2) of the Advisers Act. Without admitting or denying the SEC’s findings, VCP consented to an order requiring it to pay a civil penalty of $100,000 and a censure.”
“ United States SEC Fines 3 Investment Advisors $540,000 for Acting as Unregistered Brokers for StraightPath Venture Partners in Selling Shares of Pre-IPO Companies & $100,000 Fine on VCP Financial for Using Impermissible Liability Disclaimers Investing in Private Funds by Retail Clients, United States SEC Fined StraightPath Venture Partners $2.8 Million Fine & Disgorgement in 2024 September for Unauthorised Selling Shares of Pre-IPO Companies, Raised $17 Million from 75 Investors and Received $2.1 Million in Compensation “
United States SEC Settles StraightPath Venture Partners Fraud Charges with $2.8 Million Fine & Disgorgement for Unauthorised Selling Shares of Pre-IPO Companies, Raised $17 Million from 75 Investors and Received $2.1 Million in Compensation
14th September 2024 – The United States Securities and Exchange Commission (SEC) has settled StraightPath Venture Partners fraud charges with $2.8 million fine & disgorgement for unauthorised selling shares of pre-IPO companies, raising $17 million from more than 75 investors and received $2.1 million in compensation. United States SEC (12/9/24): “The Securities and Exchange Commission today announced settled charges against three sales agents from StraightPath Venture Partners—Anthony Guarino, Robert Seropian, and Frank Vecchio—for unregistered broker activity, including selling membership interests in LLCs that purported to invest in shares of pre-IPO companies. Vecchio also settled the SEC’s previously announced fraud charges against him. According to the SEC’s orders against Guarino and Seropian and the previously filed complaint against Vecchio, each of them allegedly provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of a broker, despite not being registered as brokers. The SEC’s orders against Guarino and Seropian found, and the SEC’s complaint against Vecchio alleged, that they collectively solicited upwards of $17 million in funds from at least 75 investors and obtained approximately $2.1 million in transaction-based compensation among them. The SEC’s order against Guarino also finds that he actively solicited investments for interests in funds managed by Legend Venture Partners, another investment adviser that purported to invest in shares of pre-IPO companies and that was previously charged by the Commission with fraud and other violations. The SEC’s complaint against Vecchio also alleged that he made false or misleading statements to investors he solicited on behalf of StraightPath Venture Partners regarding the fees he and the manager of the funds received. The SEC’s orders find that Guarino and Seropian violated the broker-dealer registration provision of the federal securities laws. Without admitting or denying the findings, Guarino and Seropian agreed to cease and desist from future violations and to industry and penny stock bars. Guarino agreed to pay disgorgement and prejudgment interest of $431,287 and a civil penalty of $100,000. Seropian agreed to pay disgorgement and prejudgment interest of $1,392,367 and a civil penalty of $300,000. Without admitting or denying the findings, Vecchio agreed to a permanent injunction from future violations of the antifraud and broker-dealer registration provisions of the federal securities laws and to industry and penny stock bars. Vecchio also agreed to pay disgorgement and prejudgment interest of $544,250 and a civil penalty of $90,000.”
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